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COMMUNITY HEALTH SYSTEMS, INC. (NYSE:CYH) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

COMMUNITY HEALTH SYSTEMS, INC. (NYSE:CYH) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.

(i) Appointment of Chief Financial Officer; Compensation
Arrangements in Connection Therewith

On May16, 2017, Community Health Systems, Inc. (the Company),
announced that the Companys Board of Directors has appointed
Thomas J. Aaron, as Chief Financial Officer of the Company,
effective immediately, replacing W. Larry Cash, the Companys
President of Financial Services and Chief Financial Officer, who
retired on such date. The contemplated appointment of Mr.Aaron
and retirement of Mr.Cash were previously announced in a Current
Report on Form 8-K filed by the Company on February22, 2017,
which is incorporated herein by reference. A copy of the press
release making this announcement is attached as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by
reference into this Item 5.02.

On May16, 2017, the Board of Directors of the Company, upon
recommendation of the Compensation Committee of the Board of
Directors (the Compensation Committee), approved certain
compensation arrangements for Mr.Aaron described below in
connection with his promotion to Executive Vice President and
Chief Financial Officer.

2017 Base Salary

The Board of Directors approved an increase in Mr.Aarons annual
base salary from $600,000 to $675,000, effective May16, 2017.
Mr.Aaron is an employee of the Companys wholly-owned subsidiary,
CHSPSC, LLC, and he does not have a written employment agreement.

2017 Cash Incentive Compensation

The Board also established performance goals for Mr.Aaron in the
position of Executive Vice President and Chief Financial Officer
for the period from May16, 2017 to December31, 2017 (the 2017 CFO
Period), under the Companys 2004 Employee Performance Incentive
Plan (the Cash Incentive Plan). These performance goals are
similar to those that were established for the Companys other
executive officers in February 2017. For the 2017 CFO Period, the
incentive compensation plan established by the Board of Directors
for Mr.Aaron is based on the attainment of key financial
objectives as follows (expressed as a percentage of base salary
payable to Mr.Aaron during the 2017 CFO Period (the Prorated Base
Salary) as reflected below under Opportunity), subject to the
ability to receive an additional percentage of the Prorated Base
Salary for overachievement of Company-level goals as noted below:

Performance Goal

Opportunity

Company EBITDA

%

Continuing Operations EPS

%

Net Revenues

%

Total Shareholder Return

%

Performance Improvements

%

Total

%
The incentive compensation targets for Mr.Aaron as noted
above include a component for relative Total Shareholder
Return (1 year) relative to a peer group consisting of
selected companies in the Healthcare Facilities Group. Up to
15% of his Prorated Base Salary can be earned if the maximum
target of above the 65th percentile of this peer
group is attained.

An incentive opportunity is included for the attainment of
specific non-financial performance improvements. The
incentive compensation to be awarded for the attainment of
non-financial performance improvements has been set at 20%
of the Prorated Base Salary; this amount will be reduced if
the performance improvements are not attained. Any such
reduction will be determined in the discretion of the
Compensation Committee. As previously announced in the
Companys Current Report on Form 8-K, filed with the
Securities and Exchange Commission (SEC) on February24,
2017, the Companys 2017 non-financial performance criteria
include: successful physician and mid-level practitioner
recruitment efforts; maintaining expenditures within the
established capital budget; maintaining/improving the prior
years

overall clinical compliance (including Joint Commission
scores); volume, revenue, and earnings growth and total
shareholder return, relative to industry peers; and
substantial progress toward the Companys portfolio
rationalization and deleveraging plan.

Mr.Aaron will have the opportunity to achieve an additional
percentage of his Prorated Base Salary for overachievement of
Company-level goals up to a maximum total incentive
compensation amount equal to 175% of his Prorated Base
Salary.

In addition, to Mr.Aarons offer of employment to serve as Senior
Vice President in 2016, which was approved by the Board at that
time upon the recommendation of the Compensation Committee,
Mr.Aarons incentive compensation actually paid for 2017 shall not
be less than 50% of his base salary for 2017, regardless of the
achievement of applicable objectives.This assurance of a minimum
percentage level of incentive compensation for 2017 was made to
help induce Mr.Aaron to join the Company at that time and applies
only to fiscal year 2017.

Long-Term Incentive Compensation Stock Awards

On May16, 2017, to the Companys Amended and Restated 2009 Stock
Option and Award Plan, the Board approved an equity grant of
20,000 time-based restricted shares to Mr.Aaron. This equity
grant will be effective on June1, 2017 (the grant date). The
restrictions will lapse in equal one-third (1/3) increments on
each of the first three anniversaries of the grant date, provided
that Mr.Aaron continues to be employed on such dates, subject to
certain exceptions.

(ii) Consulting Agreement with W. Larry Cash, Former Chief
Financial Officer

On May16, 2017, CHSPSC, LLC, a wholly-owned subsidiary of the
Company, entered into a consulting agreement (the Consulting
Agreement) with W. Larry Cash, the Companys retiring President of
Financial Services and Chief Financial Officer, who retired on
such date. to the Consulting Agreement, Mr.Cash will provide
certain consulting services related to matters of financial
service operations, healthcare management and other assignments
as requested by Wayne T. Smith, Chairman and Chief Executive
Officer, and/or his designee. The term of the Consulting
Agreement will be from May17, 2017 to March31, 2020. From June1,
2017 through the duration of the Consulting Agreement, Mr.Cash
will be entitled to receive consulting fees of $25,000per month.
In addition, during the term of the Consulting Agreement, Mr.Cash
will be subject to restrictions on competing with CHSPSC, LLC or
its affiliates. He will also continue to vest in any previously
granted stock options and restricted stock of Community Health
Systems, Inc. in accordance with the applicable vesting schedule.

The foregoing summary of the Consulting Agreement does not
purport to be complete and is subject to, and qualified in its
entirety by, the full text of the Consulting Agreement, which is
filed as Exhibit 10.1 hereto and incorporated into this
report by reference.

Item5.07. Submission of Matters to a Vote of Security
Holders.

The Company held its Annual Meeting on May16, 2017. The following
describes the matters that were submitted to the vote of the
stockholders of the Company at the Annual Meeting and the result
of the votes on these matters:

(1) The stockholders electedeach of the following persons as
directors of the Company for terms that expire at the 2018 annual
meeting of stockholders of the Company and until their respective
successors have been elected and have qualified:

Name

For Against Abstain BrokerNon-Votes

(a) John A. Clerico

84,049,735 2,921,177 1,570,349 13,433,851

(b) James S. Ely III

84,577,553 2,393,967 1,569,741 13,433,851

(c) John A. Fry

84,295,440 2,688,775 1,557,046 13,433,851

(d) Tim L. Hingtgen

84,055,507 2,917,951 1,567,803 13,433,851

(e) William Norris Jennings, M.D.

84,323,259 2,661,515 1,556,487 13,433,851

(f) Julia B. North

84,392,993 2,594,604 1,553,664 13,433,851

(g) Wayne T. Smith

83,019,760 3,830,964 1,690,537 13,433,851

(h) H. James Williams, Ph.D.

84,587,699 2,381,476 1,572,086 13,433,851

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W. Larry Cash and H. Mitchell Watson, Jr., whose terms as
directors expired at the 2017 annual meeting of stockholders, did
not stand for re-election, and the size of the board was reduced
by the Board of Directors from nine to eight members.

(2) The stockholders approved the advisory resolution regarding
the Companys executive compensation:

For

Against Abstain Broker Non-Votes

83,849,754

3,118,323 1,573,184 13,433,851

(3) The stockholders approved, on an advisory basis, the holding
of future advisory votes on executive compensation every one
year:

1 Year

2 Years 3 Years Abstain Broker Non-Votes

76,812,227

125,208 10,040,097 1,563,729 13,433,851

(4) The Board of Directors appointment of Deloitte Touche, LLP,
as the Companys independent registered public accountants for
2017, was ratified by the affirmative votes of the stockholders:

For

Against Abstain Broker Non-Votes

99,225,700

607,734 2,141,678 n/a

(5) The stockholders did not approve a stockholder proposal
regarding vesting of equity awards in a change in control:

For

Against Abstain Broker Non-Votes

24,704,178

61,218,873 2,618,210 13,433,851

In light of the voting results with respect to the frequency of
the advisory vote on executive compensation as set forth above
and the Companys Board of Directors recommendation that
stockholders vote to hold future advisory votes on executive
compensation each year, the Company will continue to hold such
votes each year until the next required advisory vote on the
frequency of such votes.

Item9.01. Financial Statements Exhibits

(d) Exhibits

The following items are included as Exhibits to this Form 8-K and
incorporated herein by reference:

Exhibit

Number

Description

10.1 Consultancy Agreement, dated May16, 2017, by and between
CHSPSC, LLC and Larry Cash.
99.1 Community Health Systems, Inc. Press Release, dated May16,
2017.

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COMMUNITY HEALTH SYSTEMS, INC. (NYSE:CYH) Recent Trading Information
COMMUNITY HEALTH SYSTEMS, INC. (NYSE:CYH) closed its last trading session at with 2,508,345 shares trading hands.

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